Ex-USA Springs owner seeks to buy back property

Francesco Rotondo files counteroffer for site of failed water bottling project

The former owner of the bankrupt USA Springs filed a $2 million bid last Friday to buy back the land on which he once tried to build a water bottling facility, with the intention of withdrawing 300,000 gallons a day.

In the filing, Francesco Rotondo said he placed a $50,000 down payment on the parcel, which borders Nottingham and Barrington, despite his previous failure to complete the project, his own personal bankruptcy, filings from state and local governments insisting the project’s permits have long since expired and numerous objections from nearby residents pointing to environmental problems and the area’s severe drought.

The counteroffer and the objections came in response to the proposed sale of the property for $1.2 million to Kevin B. Delaney, a Massachusetts investor and manager of Nottingham Springs LLC, who has also expressed his interested to withdraw groundwater.

“He’s bankrupt, and all of a sudden he comes up with this money?” said Denise Hart, a spokesperson for the anti-USA Springs Save Our Groundwater, in reference to Rotondo “Who are his backers? Why are they interested? There is no commonsense reason why there is a bidding war going on over these expired water permits.”

Rotondo declined comment. Attempts to reach Delaney and his attorney in the past have been unsuccessful.

Court fights

USA Springs, which had planned to sell bottled water overseas, spent more than three years and millions of dollars to overcome opposition and receive a 10-year groundwater withdrawal permit in July 2004. But it declared bankruptcy in 2008, leaving a partially finished bottling plant as it futilely tried to obtain financing.

In 2013, the bankruptcy trustee tried to sell off the land and its permit. But despite earlier claims that it was worth $125 million, the property languished at an asking price of nearly $2 million that was then slashed to $1 million. It was at this time that Delaney first expressed his interest in the property.

Meanwhile, Rotondo, who lives in Pelham, filed personal bankruptcy in January 2013. He at first listed his assets at $71 million and his liabilities at just under $10 million. In an amended filing, he listed both assets and liabilities as under $50,000.

In any case, Deutsche Bank National Trust Company, the holder of the mortgage on Rotondo’s family-held property in Kittery, Maine, asked for relief from the bankruptcy stay, meaning it wanted to foreclose on the Maine home.

Rotondo objected to that relief back in July, saying that he was hoping for a favorable outcome USA Springs case. In that July objection, he said he intended “to bid with investors to regain my ownership of USA Springs Inc.” and resolve his personal bankruptcy issues.

The bankruptcy judge however granted relief from the stay a week later, though he did hold off any foreclosure of the Kittery property until Oct. 12.

Nine objections

On Sept. 14, however, the bankruptcy trustee in Rotondo’s case resigned and issued a report saying that Rotondo’s assets were essentially worthless. On Oct. 11, that trustee’s successor said that there was no property to be distributed to Rotondo’s creditors.

Then, on Nov. 4 – the deadline to submit objections to the sale of the USA Springs property – Rotondo filed his one-page “counteroffer,” with “a deposit in the amount of $50,000 tendered by a treasurer’s check.” The sale would include “all permits” in the sales agreement already signed by Delaney.

By that time, there were nine objections filed against the Delaney sales agreement, most of them explaining that the permits were not valid or shouldn’t be valid.

In one of the objections, for example, the NH Department of Environmental Services listed all the permits that would have to be renewed, including several that couldn’t be, including the 10-year large groundwater withdrawal permit, which expired in July 2014.

The DES also put the court on notice that it would oppose any attempt by the court to supersede state environmental protections. The town of Nottingham also said that the company would have to reapply for any municipal permits, including a bidding permit. That was backed up by a brief from a group called Neighborhood Guardians, which bemoaned the fact that the taxpayers have already spend $1 million in legal costs on the project.

There also were several filings that cited two untested ordinances passed in both Nottingham and Barrington forbidding commercial interests from withdrawing water for sale outside the community. The filers, including Nottingham Water Alliance, the Barrington Waterways Protection Committee and the NH Community Rights Network, also pointed to the drought that the area is being affected by.

The bankruptcy court has set a hearing on the sale for Nov. 15 in Manchester.